The dollar continued to rally versus the euro on Friday, hitting fresh 11-month highs after Fed Chair Janet Yellen’s remarks at Jackson Hole were construed as uncharacteristically hawkish.
Yellen said an increase in rates could come sooner than expected if the progress on inflation and the labor market occured more rapidly than anticipated.
At the same time, rates could stay highly accommodative in the event of a disappointing economic performance, she assured.
Yellen suggested that the unemployment rate may not warrant as much emphasis in determining when to hike rates considering the amount of slack in the labor market.
The dollar rose to $1.3215 versus the euro, adding to a sharp recent advance amid disappointing euro zone economic data.
The European Central Bank is widely seen offering stimulus just as the U.S. begins the process of tightening monetary policy.
ECB President Mario Draghi will address the conference at Jackson Hole later today.
The greenback also extended its strong weekly gains versus the sterling, touching a new 4-month peak of $1.6562.
Further gains were also seen against the yen, with the buck jumping above Y104 for the first time in months.
